Zelle vs. Venmo: What’s the Difference and Which Is Better?

It’s common to split a bill with friends and family nowadays by sending them a mobile payment or to send mobile payments to others who might have bought you something you couldn’t buy yourself. Many of these payments are sent through Zelle and Venmo. Both are peer-to-peer (P2P) apps that let you send money fast and free by looking up your friend’s email address or mobile phone number, entering an amount and hitting send.

Zelle and Venmo make sending and receiving money easy but in different ways. Zelle works as a service to move money between linked bank accounts free of charge but doesn’t hold money in your Zelle account. Venmo holds funds in your account that you can access. You’re not limited to bank account-only transactions with Venmo, either — you can also use debit and credit cards for a fee.

Compare Zelle and Venmo to decide which app works best for you and your friends:

Should I Use Zelle or Venmo?

What Is Zelle?

Zelle is a great tool if you and your network of family and friends have accounts with banks that participate in the app. With Zelle, you can transfer funds between bank accounts in minutes for free. The money transfers don’t sit in a holding account in Zelle but instead get withdrawn or deposited directly into your or your recipient’s bank accounts. Most banks participate in Zelle, but even if a bank doesn’t, you can still use Zelle to move smaller amounts of money.

What Is Venmo?

Venmo is more like a digital wallet that works similar to PayPal. Your money collects in Venmo and you can move it to other accounts, spend it or reload your Venmo balance. Some of the transactions come with fees.

How Secure Is Zelle vs. Venmo?

As you can see in the comparison chart, both Zelle and Venmo have built-in security features to make money transfers safe. Zelle’s team monitors transactions and uses authentication to ensure your banking information is protected. Venmo also monitors transactions to catch fraud and uses data encryption to protect your personal data. Both services are safe, although Venmo could be considered the more secure of the two because you can add a PIN and enable multifactor authentication in the app.

Is Zelle Faster Than Venmo?

Both P2P apps are fast, but Zelle is the fastest — and it’s free. Zelle transfers happen almost instantly. Venmo funds take one to three business days unless you pay a 1% transaction fee for an instant transfer, which is available in minutes.

Can Zelle Send Money to Venmo?

You will not be able to use Zelle to send money to a Venmo account. The two services work completely differently. Venmo funds are held as a Venmo balance in your account for you to spend or transfer, but Venmo is not considered a bank. Zelle is a P2P app designed to transfer funds between bank accounts. Since Venmo is not a bank account, you won’t be able to transfer funds to Venmo from Zelle.

The only workaround to this limitation would be to send money to the bank account a Venmo user has linked to their Venmo account. Once the user receives your Zelle transfer into their bank account, they can then transfer the funds from their linked bank account straight into their Venmo balance.

Is Zelle Reversible?

The reason Zelle transfers are so fast is that both users have set up the service through their participating banks and are enrolled in Zelle. All you need is the other person’s email address or mobile phone number to send the funds, and you’re done. This is a big plus, but the ease of sending someone cash so quickly can also be an issue if you click on the wrong person. You won’t be able to reverse transactions between enrolled accounts. However, if the recipient has not enrolled with Zelle, you might be able to cancel a transfer to them.

Zelle vs. Venmo: What’s the Difference and Which Is Better?

The main difference between Zelle and Venmo is where the funds are held. Zelle is limited because the service only moves money between bank accounts. In contrast, you can receive money into your Venmo account, which can then be withdrawn, transferred and even topped up if you need more.

If you’re looking for an alternative to the services your bank account offers, Venmo is the better of the two. You’ll be able to grow your Venmo fund account, link your credit and debit cards, withdraw funds from your Venmo account for free using Moneylink ATMs nationwide and make bank transfers.

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